Reliance Petroleum Ltd (RPL) has estimated its working capital requirement at Rs 1,260 crore for the first year of operation of its 18 million tpa refinery in Gujarat, which is the world's largest grassroots refinery.
The company will be approaching various banks for sanction of working capital of Rs 945 crore, while margin money of Rs 315 crore has been included as part of the project cost of the refinery.
The banks will be approached closer to the time of commissioning of the refinery, which is slated to be in the second half of 1999.
The Rs 10,780-crore refinery is part-financed by a rights issue of Rs 1,832.92 crore. The project cost has been appraised by the Industrial Development Bank of India (IDBI).
According to the letter of offer for the rights issue, the working capital requirement has been worked out based on 21 days crude stock, 45 days stock of chemicals and catalysts, 8 days stock of finished goods, 2 days work-in-progress, 30 days receivables and working and miscellaneous expenses for one month.
The total workforce requirement of the company after commissioning will be approximately 900. RPL has already recruited the key personnel, while the remaining manpower will be recruited before the commissioning of the plant.
RPL has entered into a 20-year throughput agreement, effective from June, 1997, with Reliance Ports and Terminals Ltd (RPTL), which provides for utilisation of the facilities being set up by RPTL. RPL has provided Rs 150 crore as non interest bearing deposits to RPTL, in consideration of RPTL providing priority use of its facilities.
The refinery will use state-of-the-art technology and has the highest complexity in the Asia-Pacific region, which will allow it to produce higher value-added products from cheaper heavier crudes. The refinery is designed to handle a wide range of crudes ranging from 100 per cent Arab light to 100 per cent Arab heavy.
A substantial advantage for RPL is that out of the total products, 0.4 million tonne of propylene, 2.51 million tonne of reformate and 1.4 million tonne of coke, constituting approximately 25 per cent of total production will be consumed in the adjoining aromatics or petrochemical complex and power plants.
RIL to up stake to 50%:
Reliance Industries Ltd, the promoter of RPL, will increase its shareholding to 50 per cent in RPL in future. Dhirubhai Ambani, chairman of Reliance, has expressed his willingness in this regard. In a bid to raise funds for the project, Reliance is exercising its warrants at Rs 20 per share. Reliance is also converting its entire holding of Triple Option Convertible Debentures into three equity shares each.
Upon exercise of all its equity options, Reliance will up its current stake to 39 per cent of RPL's fully-diluted equity capital from 21 per cent. However, its aim will now be to raise its stake further to 50 per cent in RPL.
